During the Obama Administration, we heard about something called Operation Choke Point. Basically, the administration used pressure to push banks to cut off companies that were in industries Obama and his cronies didn’t particularly care for. Some of those included things like payday lenders, which some argue take unfair advantage of the poor, but it also included the firearm industry.
Recently, some documents were unsealed that show Operation Choke Point wasn’t some conspiracy theory.
Newly-unsealed court documents released today show evidence of the federal government’s illegal Operation Choke Point program in which top government officials and federal agencies pressured banks to cut all ties with lawful businesses. More than 100 records expose depositions and damaging emails of government officials, most notably at the Federal Deposit Insurance Corporation (FDIC), who executed a secretive campaign against lawful businesses it disfavored while ignoring due process and subverting the legal and regulatory process. This illegal campaign included threats from senior government officials that agency staff would be fired and bank officials could be subject to criminal prosecution. The key findings disclosed in the filing indicate that this campaign was instituted at the very highest levels of the FDIC and has been ruthlessly and enthusiastically implemented in the field:
- In late 2010 or early 2011, the FDIC’s senior Washington officials convened a meeting of all Regional Directors (or their designees) at which a senior FDIC official gave the agency’s field officers the following message, direct from the FDIC’s highest leadership in Washington: “if a bank was found to be involved in payday lending, someone was going to be fired.” This threat had far-reaching consequences, since the regional directors collectively have supervisory authority over every FDIC-insured bank of United States.
That’s just one example listed, but there are plenty of others.
Operation Choke Point was real and frankly, it’s pretty damn scary. It’s a great example of why regulatory oversight of any industry shouldn’t be considered a blanket good thing. In this case, it clearly led to abuses of power in an effort to kill unpopular industries.
However, since it was an Obama Administration plan, surely it’s not a problem today, right?
- Despite contentions that Operation Choke Point is no longer running, the culture it created persists and some businesses previously targeted are still seeing their banking relationships terminated without cause. Many banks terminated their relationships with payday lenders abruptly with no explanation at all. Others were more forthcoming in personal discussions. Since February 2013, Advance America has received termination notices from at least 21 banks and about 275 banks have refused the company’s business because of its status as a payday lender. One bank said it was ending their relationship because of “pressure from regulators regarding reputational risk.” Another banker said that trying to do business with a payday lender would put the bank in “regulatory hell.”
Operation Choke Point is an illegal government campaign that employs strong-arm tactics to force banks to end their legal business relationships with smaller, licensed companies that were disfavored by bureaucrats from the previous administration. These industries include local small businesses like fireworks and firearms companies, home-based charities, and small-dollar lenders. In June 2014, CFSA and its largest member companies, Advance America and Check Into Cash, filed a lawsuit against the federal government seeking to end Operation Choke Point and the government’s improper regulatory overreach.
In other words, not hardly.
Let’s be honest here, what the Obama administration envisioned is precisely what’s happening to the firearm industry right now. We keep getting reports of financial companies cutting ties with various companies in the firearm industry. The framework established by Operation Choke Point sure does seem to be in place and running just like it always was. Probably even better after public sentiment swung against gun companies in the wake of Parkland.
In an op-ed over at the Washington Examiner on this very topic, Ken Blackwell writes:
Reps. Blaine Luetkemeyer, R-Mo., and Sean Duffy, R-Wis., have been leaders in exposing Operation Choke Point. And I cannot agree more Luetkemeyer’s reaction to the latest revelations when he said, “I am appalled by the blatant intimidation and bias employed by unelected bureaucrats to play partisan politics with the livelihood of our citizens. No matter your ideological leanings, the American government should not be able to destroy all that you have worked for.”
I agree with Luetkemeyer completely. Unfortunately, though, I can’t help but believe that if Operation Choke Point is to blame for what the firearm industry is experiencing, I can’t help but believe it will require congressional action to repair.
That means the midterm elections are even more important.